Interstate supply with full rate of CST, VAT + CST

[Bhalchandra Ramdasi]

Respected Sir,

My Customer is in Gujarat. We are in Maharashtra. We have to supply the material to him from our Vendor in Maharashtra and other states. Customer can not give form 'C'. Our customer wants to avail Cenvat credit.

1]Can we supply the material directly to customer from our vendor in Maharashtra. Buyer will be us & Consignee will be our customer so that our customer can avail cenvat credit. We will raise invoice from maharashtra on our customer in Gujarat charging full rate of CST.

2]Can we supply the material directly to customer from our vendor other than Maharashtra & Gujrat. Buyer will be us & Consignee will be our customer so that our customer can avail cenvat credit. We will raise invoice from maharashtra on our customer in Gujarat charging full rate of CST.

Please advice.

 

Posts / Replies

[Shiv Bansal]

The pre-requisit:-

1. You are a registered dealer with Sales Tax /MVAT in Maharashtra.

2. The customer in Gujrat is also the registrered dealer with Sales Tax/GVAT in Gujrat and also registered under the Central Excise otherwise it can not import goods from other states.

Now:-

1. From the vendors in Maharastra, the vendor shall invoice the goods on you and will ship to the customer in Gujrat. You may avail the full sales tax benefit and then invoice on your customer with full tax since the customer will not issue the C form. On the basis of your bill supported by the vendor bill, the customer may take the cenvat benefit. There is no need for any C form after charging the full tax. You issue a commercial invoice which may include your margins as well. You shall receive the payment as per your commercial invoice and then pay to the vendor as per your agreed price with the vendor.

2. From the vendors in Gujrat, the vendor shall invoice on you with full CST and shall ship the same to your customer in Gujrat itself. It shall be a E-1 transaction as per section 6(2) of the CST Act.  You have to give form E-1 to your customer, The customer shall not issue any form to anyone under the sales tax. The customer shall avail the benefit of CENVAT credit on the strength of the vendor bill supported by transportation documentation You have to issue a consolidated commercial invoice on your customer. It shall be a bill after considering the cost, your margin and sales tax cost to you. The only issue is that your cost shall be known to your customer.

3. From other states, the same process as per S.no. 2 may be applied.

In case of 2 & 3 please use the appropraite road permit to be given by your customer as applicable in Gujrat.

Thanks

S.R. Bansal